State in Decline, Employment in RI Cities and Towns: Middletown

According to data provided by the Rhode Island Department of Labor and Training, Middletown’s employment picture has been surprisingly bad. In February, the town’s not-seasonally-adjusted unemployment rate was 13.4%, compared with 12.1% for the state, and its January rate of 13.6% was the highest in the twenty-two years of data. In March, the rate dropped to 12.3% (compared with the state’s 11.8%), but the “improvement” was entire due to a drop in the total number of residents looking for work.

Between the 2000 and 2010 Census reports, Middletown’s population dropped 6.8%. Over the same period, its labor force (those working and looking for work) fell 3.7%, and the total number of employed residents slid 10.3%.

In many other cities and towns, the labor force has actually grown while employment has fallen, which has made their unemployment look worse. West Warwick’s 13.3% unemployment rate in February is partially attributable to a 4.1% increase in labor force. Middletown has decreases across the board.

That dark picture comes a little more into focus with a closer look at the town’s March 2012 employment data. The labor force is now a little bit below the 22-year average, and the number of employed residents is farther below. The number of employed residents (those looking for work and unable to find it) is hovering around 7% of the total population, and January saw the highest number on record.

In the following chart, unemployment is the distance between the two lines. The chart also illustrates the care with which these numbers must be interpreted. The jagged lines prior to 2000 are inexplicable except as a quirk of the model or an outright error. (I’ll be looking into which it is when I combine these town reports into a statewide article.) The upper peaks coincide with summer months, so it’s almost as if the first half of the data is not seasonally adjusted while the second half is, but it’s all supposed to be unadjusted, and the right side of the chart resembles the results for other cities and towns.

Note on the Data

The population data above comes from the U.S. Census conducted every ten years and is therefore generally considered reliable, to the extent that is used as reference for various government programs and voter districting.

The labor force and unemployment data, however, derives from the New England City and Town Areas (NECTAS) segment of the Local Area Unemployment Statistics (LAUS) of the federal Bureau of Labor Statistics (BLS). A detailed summary of the methodology is not readily available, but in basic terms, it is a model based on and benchmarked to several public surveys. It can be assumed that the sample rate (i.e., the number of people actually surveyed) in each Rhode Island town is very small (averaging roughly 30 people per municipality).

The trends shown, it must be emphasized, are most appropriately seen as trends in the model that generally relate to what’s actually happening among the population but are not an immediate reflection of it. Taking action on the assumption that the exact number of employed or unemployed residents shown corresponds directly to real people in a town would vest much too much confidence in the model’s accuracy.

Be that as it may, the data has been collected and published, and taken a town at a time, it is relatively easy to digest. So, curiosity leads the Current to see it as the best available data to deepen our understanding of trends within Rhode Island. If the findings comport with readers’ sense of how the towns relate to each other, perhaps lessons regarding local and statewide policies may be drawn. If not, then the lesson will be on the limitations of data in our era of information overload.

I'm surprised Middletown's population has dropped so significantly and am really shock their unemployment is higher than the rest of the state. It must be related in some way to the Navy Base. I always thought Middletown's economy was stronger than the rest of the state because of the Navy base, defense contractors, and the hospitality industry. It also has a good deal of commercial real estate. Guess I was wrong.

Mike

Defense spending on contracts is under scrutiny; remember the scandal of bid rigging at NUWC just a year ago? The Navy is looking hard at defense contracts these days. Maybe that has something to do with it.